Implications of the COVID-19 Crisis on Philippine Multilaterialism

Speech before the international webinar on Implications of the COVID-19 Crisis on Philippine Multilateralism hosted by the Philippine Council for Foreign Relations on its 35^th year anniversary.

Good afternoon/ ladies and gentlemen. Shout out first to the Philippine Council for Foreign Relations for hosting its first international webinar. 

To the distinguished speaker Mr Miguel Bautista and esteemed reactors Ambassador Vidal Querol and Mr Johnny Chotrani, I deem that you have already shed with us your wisdom and experiences when it comes to Philippine multilateralism.

And for me, as the last speaker  in the pool of experts, what more can I add to this continuing narratives on multilateralism?

So, I’d rather try to synthesize the discussion and spell out own analysis from the thesis  and anti-thesis of multilateralism in the post-covid crisis narratives.

There’s this quote from Dutch Philosopher Baruch Spinoza that says, “States should practice multilateralism and abandon unilateral actions that adversely affect a democratic and equitable international order, refraining from the threat or use of force

However, we're essentially in the beginning of another Cold War between China and the United States. And the Philippines, now dwarfed between the two competing powers, is nonetheless indisposed of the grave consequences of its choice.

As Spinoza calls it again, “nature abhors a vacuum”. 

Yes indeed, there’s a leadership vacuum posited by the coronavirus pandemic, and the consequences of the breakdown of the US-China relations at the moment which can be construed as a grave competition of unpopularity/ for the world while the global economy tries to recover and work together to achieve the keystone / of the whole arch/ of globalization and global trade.

With that pulled out, there's going to be a tremendous amount of disturbance and disruption with the rise of populist leaders that signals the fall of liberalism and considers the brink of multilateralism.

And this Cold War analogy is "not perfect, but there are elements, including/ the hardening of system-type competition, racketing up of military competition, and pressure to delink economically, that were not as evident a few years ago," described by the Philippine counterpart in the US, the Council on Foreign Relations. 

The ideological struggle  between the Communist and Capitalist systems as espoused by Moscow and Washington can be translated nowadays to the standoff between Washington and Beijing which can now be compared to the foothills of the new Cold War as articulated by former Secretary of State Henry Kissinger.

So far, we heard in-depth insider’s notes and experiential comparative analysis of the European Union and ASEAN, of India and ASEAN, and of China and the US from our main speaker and two distinguished reactors before me. 

But synthesizing everything and weaving it from using theoretical frameworks on International Political Economy, there’s this nomenclature called, Economic Nationalism or sometimes referred to as Neo-Mercantilism.

The global economic recession and depression have contracted nations-states to finally own its economic and financial protectionism caused by the havoc interests of health insecurity caused by the COVID-19. It is still unresolved as the world transitions to the new normal, but it remains indefinite to resolving the economic impact of the killer virus.

Now, economic nationalism developed theoretically, to criticize economic liberalism model with the following tenets.

First, that states compete economically. A good examples would be the entry of trade war  between the US and China which we will see more of 2.0 and 3.0 of this economic slash technological warfare in the near future. / It debunks the thesis of liberalism  where it believes that companies compete economically, but never the states. But we saw in the covid pandemic that only states failed, so do big companies.

Secondly, free trade only benefits the wealthiest, most advanced nations. But during the COVID -19 pandemic, the contagion became an equalizer. It crippled many sophisticated public health systems and bug down economies of first-world and developed countries from Europe to the United States, Japan and South Korea / including emerging economies of Brazil and Nigeria.

The assumption embodies that only the advanced or “mature” industries / will defeat less advanced or “infant” industries. But the pandemic has reversed the tide. We saw how start-ups and other innovative companies / survived the pandemic, seeing respected companies fell at the mercy of the COVID-19.

Thirdly for the less advanced nations there needs to be alternative way of getting rich. Free trade won’t lead to riches. It wasn’t true again / as we saw how the pandemic levelled off the playing field. We saw how illiberal economies like Vietnam, China, Cuba and Russia were unscathed by the economic impacts of the COVID-19 and even became crusaders for helping bigger and developed nations combat the unforgiving virus.

Talking about the Political Economy of Pandemics, the COVID-19 policy responses have had attempted to represent the unprecedented challenge Policy- makers worldwide, have to react fast to a totally new type of crisis under enhanced public scrutiny, as these policies are immediately compared across countries.

Then what are the lessons gained and learned: 

·         History shows COVID-19’s economic fallout may be with us for decades. 

·         In large-scale pandemics, effects will be felt by the global economy, or across wider regions for two reasons/ (1) the infection itself is widespread which we saw in the COVD 19, and (2) because trade and market integration / eventually it propagates the economic shock across the map. 

What are the Staggering Findings: 

·       The effects are staggering when we speak of large scale economy  affecting pandemics based from the experience in past pandemics. Economic depression / can take from 5 to 10 years.

·      This neoclassical mechanism considers the labour-to-capital ratio of declines of the Loss of labour without parallel destruction of capital leading to a rebalancing of the relative returns to labour and capital.

·      In the past wars occur before pandemics, but now we see the reverse where a pandemic affects conflicts by major powers. 

So what will be the next Liberal Order

·     The liberal world order is collapsing because its leading patrons,starting with the United States with 75 years of American leadership/ is now being questioned.

      

     Washington is settling in for a protracted struggle for dominance with China, Russia, and other rival powers.

·      The United States may no longer be the world’s sole superpower, but its influence has never been premised on power alone. It also depends / on an ability to offer others a set of ideas  and institutional frameworks / for mutual gain.

·       A return to great-power competition would destroy what is left of the global institutions that governments rely on for tackling common problems. Liberal democracies would further descend into disunion and thereby lose their ability to shape global rules and norms.

Then how do we counter this scenario by fostering multilateralism? 

The political economy of global multilateralism can be justified. Its criteria for justification are three. 

First, multilateral agreements ideally should offer mutual gains for all the nations that are parties to them. If the gains are not contingent on being part of the multilateral agreement, principles of subsidiarity militate against joining.

Second, ideally multilateral treaties should help nations be governed as an encompassing interest their diffuse citizenry rather than special interests. One important way of achieving this goal is to increase jurisdictional competition among nations which is the defining virtue of sovereignty.

Finally, multilateral agreements should not require a complex and intrusive international enforcement apparatus, because distant international bureaucracies are likely to be captured by special interests and thus reduce the power of encompassing interests in national governance.

All in all, what will happen to the Philippines?

As the world offers a view on the multiplexity of coalition, Europe sees a repolarization of alliances, Latin America / cries for non-polarity of union/  in its region, Asia adheres to a staggering kind of multilateralism, Africa speaks of its continent's protectionaism of resources, while North America vies for the splintering of regional order.  With all the fluidity of frameworks of the community of nations in post-pandemic, in the end what I wanted to see more / is on how our country will cope up from changes of the multilateral world.

The incentives underpinning a country's decision/ to enter a regional trade agreement  is when a multilateral free trade agreement is available, and of how entering a regional trade agreement affects the incentives to pursue multilateral trade liberalization.

But with the heavy burden on COVID-19 pandemic the Philippines must enter into regional trade and security agreementsthat will not undermine / the incentives towards multilateral liberalization.

But in moments of global recession and depression, et’s be open to a solid  framework of sound political economy that justifies these divergent intuitions and shows that the Philippines is rooted in more than just a reflexive liking for trade combined with a disdain for the environment, human rights, criminal justice, and world peace.

It must champion global multilateralism for practical politics where compromise is frequently necessary to present a sketch of what we would call "a regulatory ideal" - a model by which we should inform the concrete practices of global multilateralism.

Thank you very much and looking forward during the open forum.